If Global Warming Is a Lie, Will Green Investments Go Cold?
By
Bob Faulkner
Nov 24, 2009 8:45 am
ETFs, mutual funds that invest solely in environmentally friendly companies are bound to be affected.
If there’s one trend that's exploded in recent years it's been “going green.” As a result, the overwhelming majority of companies on the face of the earth have been falling over one another for ways to prove their green bona fides.
Not to be outdone, the investment business has joined in the ranks of the committed as well. We have ETFs and mutual funds that invest solely in green companies; investment banks have green tech analysts; and, maybe the biggest bonanza of them all, the huge potential for trading carbon credits as envisioned in a “cap and trade” program. (For more on green investing, read Go Green and Invest Ethically)
So what happens to all of this if the underlying crisis (anthropogenic global warming, now referenced as climate change) were called into question?
The Climate Research Unit (CRU) at the University of East Anglia (UK) is the heart of climate science research and at the very foundation of climate-change theory. About a week ago, someone anonymously posted on a Russian server thousands of emails and documents from the inner core of scientists at the CRU and their peers. Whether this disclosure was the result of a hacker or a whistle blower is unknown for certain.
What little coverage has taken place in the mainstream media has largely focused upon the apparent criminality of the act as well as the usual claim of things being taken out of context. The disclosures appear to be legitimate as there's been no real denial of their validity. Someone has taken the time to put the data in searchable form at the following site: http://www.eastangliaemails.com/index.php.
Aside from the legal aspects of their “acquisition,” what the exchanges appear to show as much as anything is the politics of science. They highlight an apparent willingness to suppress data as well as fellow scientists that fail to support their opinions.
Domestically, we have a huge investment in the “planet at risk” theory. We've waged war for decades on fossil fuels; our EPA has declared the gas we exhale a pollutant; and, unsurprisingly, more than a few politicians are attempting to ride the wave.
What if it’s all BS?
Aside from the potential loss of a massive carbon trading operation by Goldman Sachs (GS), there would be some very real losers out there. Large amounts of capital have been thrown at green-technology companies in recent years. The venture capital industry invested $5.2 billion in clean technology companies in 2007 according to Cleantech Group, LLC and another $8.4 billion last year. While the numbers are off in 2009, that’s driven largely by the current state of the economy. On the public side, there are hundreds of companies trading every day that directly or indirectly benefit from the “clean” movement. The Cleantech Index (CTIUS) boasts a collective market capitalization of more than $100 billion.
The underlying assumption in many of those investments has been that political mandates will be instituted as a means to forestall the apocalypse and that those mandates will, for the most part, override economics. Whether it's bio-fuels, solar-/wind-based electricity, hybrid vehicles, or whatever, the catalyst behind most initiatives isn't their inherent efficiency versus alternatives, but their relative carbon footprint versus those alternatives.
Hey, I have no great desire to foul up the planet any more than the next person, but if in reality, it’s all a fraud, it makes Bernie Madoff look like a Little Leaguer. Will the powers that be simply push through their plans and ignore the questions that Climategate raises?
Before you dismiss these questions out-of-hand as those of a raving lunatic, keep one point in mind: China and India have no interest in throttling their economies in the interests of climate change. Any opportunity to challenge the validity of the movement will be probed. Since the CRU is the scientific backstop of the UN’s Intergovernmental Panel on Climate Change, it goes to the very heart of the issue.
Investment dollars follow the perceived opportunities. But, as we’ve seen as recently as the dot-com bubble, not all investment trends are built upon solid foundations.
Obviously, I have no way of knowing the answers. But to say that the next year or so will be an interesting time is a massive understatement.
For more on this subject, read The Impact of an Absent Climate Crisis.
Not to be outdone, the investment business has joined in the ranks of the committed as well. We have ETFs and mutual funds that invest solely in green companies; investment banks have green tech analysts; and, maybe the biggest bonanza of them all, the huge potential for trading carbon credits as envisioned in a “cap and trade” program. (For more on green investing, read Go Green and Invest Ethically)
So what happens to all of this if the underlying crisis (anthropogenic global warming, now referenced as climate change) were called into question?
The Climate Research Unit (CRU) at the University of East Anglia (UK) is the heart of climate science research and at the very foundation of climate-change theory. About a week ago, someone anonymously posted on a Russian server thousands of emails and documents from the inner core of scientists at the CRU and their peers. Whether this disclosure was the result of a hacker or a whistle blower is unknown for certain.
What little coverage has taken place in the mainstream media has largely focused upon the apparent criminality of the act as well as the usual claim of things being taken out of context. The disclosures appear to be legitimate as there's been no real denial of their validity. Someone has taken the time to put the data in searchable form at the following site: http://www.eastangliaemails.com/index.php.
Aside from the legal aspects of their “acquisition,” what the exchanges appear to show as much as anything is the politics of science. They highlight an apparent willingness to suppress data as well as fellow scientists that fail to support their opinions.
Domestically, we have a huge investment in the “planet at risk” theory. We've waged war for decades on fossil fuels; our EPA has declared the gas we exhale a pollutant; and, unsurprisingly, more than a few politicians are attempting to ride the wave.What if it’s all BS?
Aside from the potential loss of a massive carbon trading operation by Goldman Sachs (GS), there would be some very real losers out there. Large amounts of capital have been thrown at green-technology companies in recent years. The venture capital industry invested $5.2 billion in clean technology companies in 2007 according to Cleantech Group, LLC and another $8.4 billion last year. While the numbers are off in 2009, that’s driven largely by the current state of the economy. On the public side, there are hundreds of companies trading every day that directly or indirectly benefit from the “clean” movement. The Cleantech Index (CTIUS) boasts a collective market capitalization of more than $100 billion.
The underlying assumption in many of those investments has been that political mandates will be instituted as a means to forestall the apocalypse and that those mandates will, for the most part, override economics. Whether it's bio-fuels, solar-/wind-based electricity, hybrid vehicles, or whatever, the catalyst behind most initiatives isn't their inherent efficiency versus alternatives, but their relative carbon footprint versus those alternatives.
Hey, I have no great desire to foul up the planet any more than the next person, but if in reality, it’s all a fraud, it makes Bernie Madoff look like a Little Leaguer. Will the powers that be simply push through their plans and ignore the questions that Climategate raises?
Before you dismiss these questions out-of-hand as those of a raving lunatic, keep one point in mind: China and India have no interest in throttling their economies in the interests of climate change. Any opportunity to challenge the validity of the movement will be probed. Since the CRU is the scientific backstop of the UN’s Intergovernmental Panel on Climate Change, it goes to the very heart of the issue.
Investment dollars follow the perceived opportunities. But, as we’ve seen as recently as the dot-com bubble, not all investment trends are built upon solid foundations.
Obviously, I have no way of knowing the answers. But to say that the next year or so will be an interesting time is a massive understatement.
For more on this subject, read The Impact of an Absent Climate Crisis.

No positions in stocks mentioned.
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(12)
Reply
2009-11-24 09:09:44
Minyans deserve better
Minyanville is supposed to be an educational site. Presenting a Cliff Notes version of the story about some of those e-mails simply echoes what FOX Noise Channel and other 24/7 media have presented.
There are deeper analyses of the nature of the discussion that unfolded in some of those e-mails that clearly and rightfully question the ethics of the research methodology on certain studies that were discussed. However, these more thoughtful analyses do not conclude that all of the data on global warming are now suspect because of the actions of a few scientists.
Minyans deserve more critical thinking and deepr anlyses than than this column provides.
There are deeper analyses of the nature of the discussion that unfolded in some of those e-mails that clearly and rightfully question the ethics of the research methodology on certain studies that were discussed. However, these more thoughtful analyses do not conclude that all of the data on global warming are now suspect because of the actions of a few scientists.
Minyans deserve more critical thinking and deepr anlyses than than this column provides.
2009-11-24 09:29:00
Minyans deserve better
Great story...Its nice to see people asking real questions and not trying to help in covering up the greatest scam in the history of the world......And Rosalyn..Im not sure "critical thinking and deeper anlyses" would includ throwing out any fact that does not support your theroy
2009-11-24 09:50:45
re: Rosalyn
I think you're missing the point. Solar, as an example, is not economically viable today in broad-based applications on a levelized cost of energy basis. It's cost disadvantage is not a function of scale so throwing $$$$ at it doesn't change the equation but that of efficiency in photovoltaics. However, social "need" to reduce carbon emissions trumps the econ argument. If that need is no longer there, what does that do to all of the green plays out there?
2009-11-24 11:19:22
re: Rosalyn
Concentrated solar power (CSP), in those few (desert) environments where it works best, actually IS competitive on cost, or nearly so.
2009-11-24 11:34:42
better science, and contingent probability
The case for man-made global warming (AGW - "A" is for "anthropogenic", a fancy term for man-made) is based on measurements from the last 150 years, and complex models of global climate.
On the other hand, there is solid evidence, extending back 400,000 years, that Ice Ages are cyclical, and predictable (Vostok ice core, e.g.). This evidence tells us that the interglacial period (the "warm part" of the cycle) tends to last 12,000 years. The Holocene epoch, which is the geologists term for the current interglacial, has, indeed, lasted 12,000 years. The strong cycle adherence may have to do with the Milankovitch cycle theory; but it does seem to exist.
---
So, of the two climactic phenomena, which should we be more concerned about ? Well, which one has worse outcomes ? We hear form the AGW side that sea levels may rise by 2 meters in the coming century. Geology, on the other hand, tells us that sea levels during a glacial maximum are 120 meter meters lower than today's. Does that suggest which phenomenon is the more powerful of the two ?
On the other hand, there is solid evidence, extending back 400,000 years, that Ice Ages are cyclical, and predictable (Vostok ice core, e.g.). This evidence tells us that the interglacial period (the "warm part" of the cycle) tends to last 12,000 years. The Holocene epoch, which is the geologists term for the current interglacial, has, indeed, lasted 12,000 years. The strong cycle adherence may have to do with the Milankovitch cycle theory; but it does seem to exist.
---
So, of the two climactic phenomena, which should we be more concerned about ? Well, which one has worse outcomes ? We hear form the AGW side that sea levels may rise by 2 meters in the coming century. Geology, on the other hand, tells us that sea levels during a glacial maximum are 120 meter meters lower than today's. Does that suggest which phenomenon is the more powerful of the two ?
2009-11-24 20:05:30
investment considerations
This article engages in sensible consideration of the investment implications if, and I repeat IF, AGW is (finally) perceived to be a scam. The case that data was falsified, selectively used, and that GW and the need for Carbon regimens are enrichment schemes has been well-researched, as for instance in THERE IS NO GOD BUT GLOBAL WARMING & ALGORE IS HIS PROFIT (http://theburningplatform.com/economy/ there-is-no-god-but-global-warming-algore-is-his-profit ).
2009-11-24 20:37:49
Minyans deserve better
Rosyln -
Have you ever collected scientific data? Done a data analysis? Even read one of the many published journals on it?
I will admit that I have not done graduate level work. I do however, I did get a BA in Geology. I can tell you from field experience that even the "unbiased" act of data collection is itself an interpretation.
The reality is that global warming is not science in the sense that it can ever be tested or repeated. It's just a politically charged, "who knows if it's right?" computer model and that's all it will ever be. I suspect the "rogue" scientists are simply being honest.
Have you ever collected scientific data? Done a data analysis? Even read one of the many published journals on it?
I will admit that I have not done graduate level work. I do however, I did get a BA in Geology. I can tell you from field experience that even the "unbiased" act of data collection is itself an interpretation.
The reality is that global warming is not science in the sense that it can ever be tested or repeated. It's just a politically charged, "who knows if it's right?" computer model and that's all it will ever be. I suspect the "rogue" scientists are simply being honest.
2009-11-24 20:43:57
better science, and contingent probability
David -
Thank you, thank you, thank you!!
My BA is Geology. It drives me crazy to listen to people talk about the Earth like we're in charge of the show. People talk about science without even have the first sense of how long this planet has been around and been changing. Standing in front of outcropping after outcropping and making guesses about how it was formed is a humbling experience.
We *cannot* make predictions on something as complex as the atmosphere based on the data we have, which is barely 1/2 of a blink of an eye in Earth time. An honest climatologist would tell you that first, middle and last. However, governments control research money and when they only give grants for certain kinds of study, that's what you do. :(
Thank you, thank you, thank you!!
My BA is Geology. It drives me crazy to listen to people talk about the Earth like we're in charge of the show. People talk about science without even have the first sense of how long this planet has been around and been changing. Standing in front of outcropping after outcropping and making guesses about how it was formed is a humbling experience.
We *cannot* make predictions on something as complex as the atmosphere based on the data we have, which is barely 1/2 of a blink of an eye in Earth time. An honest climatologist would tell you that first, middle and last. However, governments control research money and when they only give grants for certain kinds of study, that's what you do. :(
2009-11-24 20:47:20
A response to the Investment issue...
First, I don't think this will have much impact. People pick and choose the science they believe. It will take a lot more than 1 report to shake the main stream theory.
Second, looking at and investing in alternative technologies is not bad thing. We are not running out of oil, but we are running out of cheap oil. We cannot live as we have been - looking at these technologies now, IMO, is the answer to a long term, sustainable economy.
Second, looking at and investing in alternative technologies is not bad thing. We are not running out of oil, but we are running out of cheap oil. We cannot live as we have been - looking at these technologies now, IMO, is the answer to a long term, sustainable economy.
2009-11-24 21:27:50
better science, and contingent probability
Ah, I could not find the "friend" button. I guess I already done that.
2009-11-25 19:44:08
Environmental Impact
Ever since Maurice Strong set off the fuze that launched the carbon-is-bad industry, motivations on both sides have been unclear to the public.
I believe that is is straight-forward disagreement about the best way to achieve sustainability, clouded with greed,avarice and downright intellectual laziness.
On the one hand are the greens, who would drive us back to the stone age by reducing technology and energy inputs right when we need them the most. On the other hand are those who truly understand the problem of entropy, and realize the only way to reverse it is with massive inputs of clean, low cost energy. I believe that Focus Fusion hydrogen-boron.11 fuel is an answer.
I believe that is is straight-forward disagreement about the best way to achieve sustainability, clouded with greed,avarice and downright intellectual laziness.
On the one hand are the greens, who would drive us back to the stone age by reducing technology and energy inputs right when we need them the most. On the other hand are those who truly understand the problem of entropy, and realize the only way to reverse it is with massive inputs of clean, low cost energy. I believe that Focus Fusion hydrogen-boron.11 fuel is an answer.
2009-11-27 13:57:56
yes virginia, there still is global warming
From mthe Washington Post on this faux outrage undermining the reality of global warming:
Purloined E-mails Don't Change the Facts
Friday 27 November 2009
by: Eugene Robinson, Op-Ed
Melting ice in the Arctic. (Photo: nick_russill)
Washington - Stop hyperventilating, all you climate change deniers. The purloined e-mail correspondence published by skeptics last week -- portraying some leading climate researchers as petty, vindictive and tremendously eager to make their data fit accepted theories -- does not prove that global warming is a fraud.
If I'm wrong, somebody ought to tell the polar ice caps that they're free to stop melting.
That said, the e-mail episode is more than a major embarrassment for the scientists involved. Most Americans are convinced that climate change is real -- a necessary prerequisite for the kinds of huge economic and behavioral adjustments we would have to make to begin seriously limiting carbon emissions. But consensus on the nature and scope of the problem will dissipate, and fast, if experts try to obscure the fact that there's much about the climate they still don't know.
Here's what happened: Someone hacked into the servers at one of the leading academic centers in the field -- the Climatic Research Unit of the University of East Anglia in Norwich, England -- and filched a trove of e-mails and documents, which have been posted on numerous Web sites maintained by climate skeptics.
Phil Jones, the head of the Climatic Research Unit, released a statement Wednesday saying, "My colleagues and I accept that some of the published e-mails do not read well." That would be an example of British understatement.
In one message sent to a long list of colleagues, Jones speaks of having completed a "trick" with recent temperature data to "hide the decline." The word "trick" is hardly a smoking gun -- scientists use it to refer to clever but perfectly legitimate ways of handling data. But the "hide the decline" part refers to a real issue among climate researchers called the "divergence problem."
To plot temperatures going back hundreds or thousands of years -- long before anyone was taking measurements -- you need a set of data that can serve as an accurate proxy. The width of tree rings correlates well with observed temperature readings, and extrapolating that correlation into the past yields the familiar "hockey stick" graph -- fairly level temperatures for eons, followed by a sharp incline beginning around 1900. This is attributed to human activity, primarily the burning of fossil fuels and the resulting increase in heat-trapping atmospheric carbon dioxide.
But beginning around 1960, tree-ring data diverges from observed temperatures. Skeptics say this calls into question whether tree-ring data is valid for earlier periods on the flat portion of the hockey stick -- say, 500 or 1,000 years ago. Jones and others acknowledge they don't know what the divergence means, but they point to actual temperatures: It's warmer now than it was 100 years ago.
Another e-mail -- from Kevin Trenberth of the National Center for Atmospheric Research in Boulder, Colo. -- is even more heartening to the skeptics. Trenberth wrote last month of the unusually cool autumn that Colorado was experiencing, and went on: "The fact is that we can't account for the lack of warming at the moment and it is a travesty that we can't."
He appears to be conceding skeptics' claim that over the past decade there has been no observed warming. In truth, though, that wouldn't be much of a concession. At issue is the long-term trend, and one would expect anomalous blips from time to time.
From my reading, the most damning e-mails are those in which scientists seem to be trying to squelch dissent from climate change orthodoxy -- threatening to withhold papers from journals if they publish the work of naysayers, vowing to keep skeptical research out of the official U.N.-sponsored report on climate change.
In his statement, Jones noted that the e-mail hack occurred just days before the climate summit in Copenhagen. "This may be a concerted attempt to put a question mark over the science of climate change," he said. There's that understatement again.
The fact is that climate science is fiendishly hard because of the enormous number of variables that interact in ways no one fully understands. Scientists should welcome contrarian views from respected colleagues, not try to squelch them. They should admit what they don't know.
It would be great if this were all a big misunderstanding. But we know carbon dioxide is a greenhouse gas, and we know the planet is hotter than it was a century ago. The skeptics might have convinced each other, but so far they haven't gotten through to the vanishing polar ice.
(c) 2009, Washington Post Writers Group
Purloined E-mails Don't Change the Facts
Friday 27 November 2009
by: Eugene Robinson, Op-Ed
Melting ice in the Arctic. (Photo: nick_russill)
Washington - Stop hyperventilating, all you climate change deniers. The purloined e-mail correspondence published by skeptics last week -- portraying some leading climate researchers as petty, vindictive and tremendously eager to make their data fit accepted theories -- does not prove that global warming is a fraud.
If I'm wrong, somebody ought to tell the polar ice caps that they're free to stop melting.
That said, the e-mail episode is more than a major embarrassment for the scientists involved. Most Americans are convinced that climate change is real -- a necessary prerequisite for the kinds of huge economic and behavioral adjustments we would have to make to begin seriously limiting carbon emissions. But consensus on the nature and scope of the problem will dissipate, and fast, if experts try to obscure the fact that there's much about the climate they still don't know.
Here's what happened: Someone hacked into the servers at one of the leading academic centers in the field -- the Climatic Research Unit of the University of East Anglia in Norwich, England -- and filched a trove of e-mails and documents, which have been posted on numerous Web sites maintained by climate skeptics.
Phil Jones, the head of the Climatic Research Unit, released a statement Wednesday saying, "My colleagues and I accept that some of the published e-mails do not read well." That would be an example of British understatement.
In one message sent to a long list of colleagues, Jones speaks of having completed a "trick" with recent temperature data to "hide the decline." The word "trick" is hardly a smoking gun -- scientists use it to refer to clever but perfectly legitimate ways of handling data. But the "hide the decline" part refers to a real issue among climate researchers called the "divergence problem."
To plot temperatures going back hundreds or thousands of years -- long before anyone was taking measurements -- you need a set of data that can serve as an accurate proxy. The width of tree rings correlates well with observed temperature readings, and extrapolating that correlation into the past yields the familiar "hockey stick" graph -- fairly level temperatures for eons, followed by a sharp incline beginning around 1900. This is attributed to human activity, primarily the burning of fossil fuels and the resulting increase in heat-trapping atmospheric carbon dioxide.
But beginning around 1960, tree-ring data diverges from observed temperatures. Skeptics say this calls into question whether tree-ring data is valid for earlier periods on the flat portion of the hockey stick -- say, 500 or 1,000 years ago. Jones and others acknowledge they don't know what the divergence means, but they point to actual temperatures: It's warmer now than it was 100 years ago.
Another e-mail -- from Kevin Trenberth of the National Center for Atmospheric Research in Boulder, Colo. -- is even more heartening to the skeptics. Trenberth wrote last month of the unusually cool autumn that Colorado was experiencing, and went on: "The fact is that we can't account for the lack of warming at the moment and it is a travesty that we can't."
He appears to be conceding skeptics' claim that over the past decade there has been no observed warming. In truth, though, that wouldn't be much of a concession. At issue is the long-term trend, and one would expect anomalous blips from time to time.
From my reading, the most damning e-mails are those in which scientists seem to be trying to squelch dissent from climate change orthodoxy -- threatening to withhold papers from journals if they publish the work of naysayers, vowing to keep skeptical research out of the official U.N.-sponsored report on climate change.
In his statement, Jones noted that the e-mail hack occurred just days before the climate summit in Copenhagen. "This may be a concerted attempt to put a question mark over the science of climate change," he said. There's that understatement again.
The fact is that climate science is fiendishly hard because of the enormous number of variables that interact in ways no one fully understands. Scientists should welcome contrarian views from respected colleagues, not try to squelch them. They should admit what they don't know.
It would be great if this were all a big misunderstanding. But we know carbon dioxide is a greenhouse gas, and we know the planet is hotter than it was a century ago. The skeptics might have convinced each other, but so far they haven't gotten through to the vanishing polar ice.
(c) 2009, Washington Post Writers Group
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